Credit cards issued in the United States are about to get safer. A year from now most credit cards issued in our country will have EMV “smart card” technology. This means the cards will have an embedded security chip to hold banking information.
To make a purchase with the smart card, you put the card into a terminal that reads the chip’s data. Then you enter a unique PIN.
Unlike our current credit cards with just a magnetic strip, the security chip makes EMV cards extremely difficult to copy. The required PIN makes a stolen credit card problematic for thieves to use. Online transactions, however, will continue to be vulnerable. You will still need to take precautions when shopping on the internet.
Credit cards with the microchip have been in use outside the United States for many years. They have been slow to catch on here, however. Consumer demand for EMV smart cards has been low as they are only needed when traveling abroad. Banks and merchants have resisted the change due to the huge cost of replacing all the existing cards and the equipment to read them.
The credit card networks (Visa, MasterCard, American Express and Discover) are the force behind the change. They are giving banks until October 2015 to upgrade their credit cards. Merchants must have readers to handle the new cards by this date. Banks and retailers that don’t convert will be liable for any fraud related to a consumer’s credit card.
Some U.S. banks already issue EMV smart cards. Unlike the cards issued overseas which use “chip and PIN” technology, most U.S. cards currently use “chip and signature” technology. These credit cards require a signature, rather than a PIN, to complete a transaction.
If you are interested in obtaining an EMV smart card now, look at Citibank, Bank of America, Chase, Wells Fargo, and American Express.
I am glad for the switch. I like the idea of a hard-to-clone credit card and greater ease using my card when travelling abroad.
What do you think?
